Insurance companies and other institutions will receive a 12-month transition period on implementing the Australian Prudential Regulation Authority's (ARPA's) risk management requirements, the regulator has announced.
In its letter to authorised deposit-taking institutions (ADIs), general insurers and life companies, APRA referred to a paper it released in May which proposed a cross-industry prudential standard to harmonise, consolidate and enhance its risk management requirements.
The regulator proposed that these changes would be effective from 1 January next year. However, it decided to provide the industry with extra breathing space, it announced.
"Further, submissions received identified several practical constraints to implementing these enhancements by 1 January 2014. APRA acknowledges these concerns," the letter read.
"APRA still proposes to respond to submissions and finalise the prudential standards by 1 January 2014 but the standards will not be fully effective until 1 January 2015."
Despite the 12-month transition period, APRA said it expected all affected entities and groups to develop and introduce implementation plans to ensure they are able to meet all requirements by the proposed date.
"APRA will monitor the progress of these implementation plans," the regulator said. "APRA considers this additional 12-month transition period will provide the industry with sufficient time to comply fully with the proposed enhancements."